Greetings, friends. It’s John Foster. In the previous article, I was describing the profitable no-indicator forex trading strategy “The Start”. This system allows to gain with the slight movement during London session, but this income is quite low compared with those you can get in case of forecasting the trend change (the general chart direction).

How to get maximum profit at forex? This question is asked by most novices who want all at once and are ready to study for that, learn new strategies and additional rules for them. Maximum profit at forex is get, as you can guess, by those traders who could predict the trend change and entered via the new trend in its very beginning. In such case, they get the maximum possible profit can be gained from the new trend, instead of feeling good with those dimes made by trading with corrections.

It won’t be possible to enter via the new trend in the beginning using most indicators. If an indicator is good, you enter somewhere in the middle, and if it’s bad – in the end, when the tendency turns and changes to the opposite. But can we forecast the trend change with no-indicator methods? Can we get a signal which won’t be late but will overtake the market? I am glad to announce that we can, and today I present the new profitable forex trading strategy without any indicators called “Inside Bar”. With that one, you will effortlessly predict when the new trend appears, if, surely, you thoroughly study the material of this article.

The Essence of the Strategy “Inside Bar”!

This trading strategy is based on the one pattern (graphical model). There are no indicators in the strategy, we won’t build any geometrical figures at the chart, except support and resistance lines. However, we can work without them.

A pattern I’ve just mentioned is called the Inside Bar (the Inside Candlestick). The Inside Bar is the bar at the chart whose maximum level (the top of the tail) is lower than the that of the previous one, and whose minimum level is higher than that of the previous one. So, it can seem to somebody that the inside bar fits into the previous one, as it’s pictured below. The latter is usually called the container.

Such patterns, as you can guess, appear quite often, but we are interested in some of them, so most inside bars will be missed by us. The step-by-step instruction will provide you with the full information about the principle of trading, and now let’s make some moments clear.

What Is Our Timeframe?

The uniqueness of the strategy “Inside Bar” is that it can be used at any timeframe – from M1 to D1. So, the strategy will suit scalpers, medium-term and long-term traders. I was testing the strategy at the M5 chart, and later, I will explain why I chose that very timeframe.

Simple and Profitable!

The “Inside Bar” will suit either novices or experienced traders, as the principle of trading is extremely simple, and it can be combined with other no-indicator strategies, as “Price Action”, for example. With that, the difficulty of this “symbiosis” increases, and so does the profitability of the system. Actually, no-indicator strategies remind me the children’s building kit, as, in contrast to systems using indicators, these can be combined with each other, building a completely new and unique algorithm. Thus, you can start trading with the simple system, as “Inside Bar”, and then add new patterns and tools of graphical analysis from other strategies into it, significantly increasing the quantity of market entrances and, surely, the total income.

How to Engage Profitable Trading with the Forex Trading Strategy “Inside Bar”?

So, let’s figure out the rules of trading themselves. I recommend learn by heart the whole step-by-step instruction, as you will have no time to take a look in this article for hints during the trading. Feel free to make some notes in the notebook, as the main point is to stick to the instruction and not to change the rules while working.

Step 1! Open any currency pair at any preferred timeframe. Define the current trend (the direction of the chart). Sometimes, the trend is not strongly expressed, and in such case, try to change the quote or to get back to the terminal a bit later, as we are interested in the trend market only. You can also set support and resistance lines, created by the current trend, as in the image below.

Step 2! As the preparations are over, wait for a signal to enter the market. Now we’ll make it clear when to buy the quote, and when to sell it.

We open a buying order if:

The current trend is downtrend, the price moves downward.

An inside bar appears, which has the bullish (upward) direction. The container bar is bearish (as in the image in the beginning of the article).

We open a selling order if:

The current trend is uptrend.

A bearish inside bar appears with the bullish container bar.

As you can see, signals are quite comprehensive and simple. The process of trading is more illustrated in the following image of the step-by-step instruction.

Step 3! The StopLoss should be set at the minimum of the container bar, if we enter to buy, and at the maximum if we enter to sell. The StopLoss must be quite little, sometimes even less than 10 pips. So, if the signal is false, we won’t lose too much. The main point is that your StopLoss mustn’t be less than 5 pips. If the maximum/minimum level of the container bar is closer, the StopLoss should be set a bit farther from it, in 5-10 pips of the opened position.

Step 4! You can leave the market using 2 methods:

Via the TakeProfit, set at the level depending on your timeframe:

For M1-M5 – 20-30 pips;

For M15-M30 – 30-45 pips;

For H1-H4 – 60-70 pips;

For D1 – 150 pips

Via the closest support/resistance level that you’ve set before trading with the previous trend. Not everybody may succeed in setting those levels correctly, so if you doubt – you’d better leave via the TakeProfit. Another point: if the closest support/resistance line is closer than 15 pips from the entrance point – it should be missed and you should enter at the next level. Also, if you understand, you can leave via Fibonacci lines or via the bank level.

Some Nuances of the Strategy!

The forex trading strategy “Inside Bar” is profitable itself, but to engage more accurate trading and gain 10-20% more, then you should apply the following rules:

You’d better trade with this system at timeframes from M5 to M30. Why so? The matter is that the change of the trend happens quite rarely, and it happens yet less often when we use the inside bar. Thus, if you trade at daily charts or at H4, then you won’t be likely to enter the market more than once a month. That’s why the “Inside Bar” strategy suits moderate scalping best. Trading at M5, for example, you can open 1-2 positions per day, which is quite enough for considerable income. If you like long-term or medium-term trading more, I recommend using this system with the “Price Action” algorithm. In such case, you will get guaranteed 100% of monthly profits, but, you must allocate some time for studying all the details of both strategies.

I don’t recommend using the strategy at M1 chart, as signals there are quite unclear, and trends at that timeframe are not always more than 10 pips, which turns trading in attempts to cover the spread. The ideal variant is M5 or M15.

Watch for the “Economical Calendar”. If you see that here appears a news for a country whose currency is in your quote, close all the positions and don’t open any new ones until the news comes away. And if a signal to buy/sell goes at the same time with the news – enter the market immediately and set the double TakeProfit, as the probability to gain the maximum profit is very high.

If you are always by the terminal when your position is opened, you can lower your StopLoss that it will be within 15 pips from the current price (lower only, don’t raise). So, when the price comes 15 pips toward you, you will be in the breakeven and won’t lose a dime even in case of a sudden turn. For these purpose, you can also use the tool called Trading Stop.

The clearest and most profitable signals come during market sessions. If a signal comes at this very time, leave the market when the market session you’ve entered in is over.

If you trade at M1-M30 charts, close all the positions during the day, don’t leave them to the next one. When American market hours are shifted by Pacific session, the chart usually falls into a flat, the trend disappears and nobody can say anything about its further behavior. It doesn’t matter for long-term traders, as they work with the global trend, and scalpers are recommended to close all the positions without leaving them for the following day.

Testing the Strategy!

I was trading with this strategy at the real account for a month. A timeframe, as I’ve mentioned in the beginning of the article, was M5. I started trading with 2 currency quotes, but then I dropped one of them, as signals were mixed up in my mind and I couldn’t watch for both charts. So, trading was going with the GBP/USD currency pair. Totally, I have opened about 25-30 positions, I wasn’t calculating precisely. I’ve earned about 80% of the deposit for a month, and it has pleased me, as the system is simple and designed for beginners.

The one thing I must mention that my intuition wanted to enter the market where I shouldn’t, as there were not so many trading signals. Nevertheless, I recommend all the readers stick to the step-by-step instruction and not to enter the market where there are no signals to buy or sell. In this only case, you will have stable income and high accuracy, as most signals of the trading system turn in profit.

Finishing!

Today we’ve studied another profitable forex trading strategy without indicators called “Inside Bar”. It will perfectly suit novices who want to trade without indicators from the beginning, and pro-traders, if they combine it with any other one (“The Start”, “Price Action”). Average profitability of the system with trading at the 5-minute-chart is 70-90% of the initial deposit per month. Its accuracy is 9/10 correct signals.